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The Impact of Legislative Reforms to Canadian Federalism on Toronto’S Ability to Reduce Poverty

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The Impact of Legislative Reforms to Canadian Federalism on Toronto’S Ability to Reduce Poverty 14 The Impact of Legislative Reforms to Canadian Federalism on Toronto’s Ability to Reduce Poverty By Jake Schabas Abstract In the past decade, the Canadian city of Toronto has undergone radical internal shifts in its socioeconomic geography and governance structure while simultaneously emerging on the world stage as an extremely livable and financially successful city. These trends have been accompanied by growing poverty concentrated in the inner suburbs at the municipality’s boundaries. In 2006, the provincial government passed the Stronger City of Toronto for a Strong Ontario Act explicitly recognizing Toronto as a mature order of government requiring commensurate responsibilities and fiscal authority. This paper critically examines the impact of this act on municipal efforts to reduce inner suburban poverty in the wake of the Toronto’s new place in Canadian federalism. Keywords: COTA, Canadian federalism, Toronto Tower Renewal, Transit City Introduction In the past decade, the Canadian city of Toronto has undergone radical internal shifts in its socioeconomic geography and governance structure at the same time that it emerged on the world stage as an extremely livable and financially successful city. Toronto is North America’s fifth largest ‘megacity,’ it ranks twelfth on the Global Financial Centres Index, and it is consistently recognized as one of the world’s most livable cities by The Economist magazine (Financial Centre Futures 2010). However, despite this rising international profile, poverty rates in Toronto are growing rapidly, particularly in areas near the City’s1 boundaries known as the ‘inner suburbs.’ Recognition that the existing Canadian federalist system does not provide the City of Toronto with adequate legislative power to address this new spatial arrangement of poverty is likewise building. In 2006, the Province passed the Stronger City of Toronto for a Stronger Ontario Act (COTA), a deliberate attempt to strengthen the authority of Toronto’s municipal government. This paper will explore to 1. The capitalized ‘City’ here refers to Toronto as a municipality, whereas ‘city’ refers to an urban form. The Impact of Legislative Reforms to Canadian Federalism 15 what extent these changes affected the City of Toronto’s ability to carry out policies addressing inner suburban poverty through an analysis of two City programs: Mayor David Miller’s Tower Renewal and Transit City. The paper will go on to argue that despite their stated intentions, these reforms do not go far enough in providing the City with sufficient legal and fiscal autonomy to alleviate inner suburban poverty. History and Context Canadian cities, like their counterparts in the United States, have historically had little formal legal standing. The 1867 British North America Act that established the operation and structure of Canadian federalism defined municipalities as creatures of the Province (Cote 2009). The 2005 COTA challenged this configuration by creating “a framework of broad powers for the City which balances the interests of the Province and the City and which recognizes that the City must be able to do the following things in order to provide good government…” (Government of Ontario 2005). The Act adopted a “permissive” rather than “prescriptive” powers approach, meaning that the City of Toronto can pass by-laws on issues not specifically prohibited by the Province (Cote 2009). This provided the City with many new powers, such as extending council terms, redistricting, and increasing the Mayor’s power, yet it prohibited creating any major new revenue sources and left social assistance programs and housing a City responsibility (Government of Ontario 2005). These limitations raise the question of whether COTA provided the City with sufficient powers to significantly improve its ability to reduce poverty in its inner suburbs. Brought to prominence by a 2004 United Way study Poverty by Postal Code: The Geography of Neighborhood Poverty, the authors found that between 1981 and 2001 census tracks defined as ‘poor’ or ‘very poor’ had increased from 16 to 108 in recently amalgamated parts of Toronto at the city’s edge (United Way 2004). These findings presented new challenges for municipal poverty reduction programs, which were predominantly located in the downtown core and far from the isolated inner suburbs. Poverty by Postal Code provoked the City to identify thirteen priority neighborhoods in the inner suburbs to receive increased social services (see attached map [Figure 1] in Appendix). These priority neighborhoods would serve as a framework for two innovative, place- based efforts under Mayor David Miller to use the new powers imparted by COTA to address poverty in Toronto’s inner suburbs. Mayor’s Tower Renewal “Toronto is a city of towers,” states the June 1, 2010 Tower Renewal Implementation Draft Book (City of Toronto 2010b). Ostensibly an 16 Berkeley Planning Journal, Volume 24, 2011 environmental initiative to improve the energy efficiency of post-war high-rise residential buildings through retrofits, the Mayor’s Tower Renewal program is a clear example of how the legislative limitations set out in COTA guided municipal policies for tackling poverty issues in Toronto (City of Toronto 2010b). Between 1945 and 1984 there were 1189 multi-unit residential buildings over eight stories tall built in clusters throughout the City of Toronto — the greatest number in North America outside of New York City (City of Toronto 2010a). Originally built to house Toronto’s young professionals, today most of these concrete frame towers are located in the city’s thirteen priority neighborhoods (see map [Figure 2]) and are home to mostly new immigrants and low-income families (City of Toronto 2010a; 2010b). In response to these socio-demographics, Tower Renewal projects included land use reforms to increase retail, social services, and employment opportunities, to spur local economic development, and to encourage walkable, healthy neighborhoods (City of Toronto 2010b). Complicating matters is that only a third of the targeted towers are publicly owned; approximately 800 towers are controlled by private owners who need convincing to participate in Tower Renewal (City of Toronto 2010b). The City therefore requires large sums of money, approximately $2 billion over 15 years, to make Tower Renewal retrofits possible and attractive to private owners (City of Toronto 2010a). Using the new powers set out in section 148 of COTA, the City plans to establish a Tower Renewal Corporation to finance individual retrofits using bonds, where all projects are grouped together to ensure that all retrofits are funded and that the risk to investors on individual renewal plans is spread among all projects (City of Toronto 2010a). Yet to make the bonds attractive to investors, the City needs to over-collateralize the capital pool by providing a small amount of equity (a maximum of $20 million annually) to give the bondholders extra protection—but that requires provincial approval (City of Toronto 2010a). Provincial approval is also needed to allow the City to give Tower Renewal loans “priority lien” status that would secure them to a building’s property taxes, therefore allowing owners to avoid second mortgages or higher mortgage payments and increasing the project’s appeal to private owners (City of Toronto 2010a). The creation of a corporation, the disposition of property taxes, and the need for provincial approval all reveal the extent to which COTA has both empowered the City while still failing to give it adequate revenue raising mechanisms. Although COTA gave the City the power to establish a corporation, it withheld authority to approve the fiscal mechanisms that could make Tower Renewal financially viable. These include extending the use of the property tax-based mechanism or providing any financial aid to a corporation by over-collateralizing its credit pool. The use of The Impact of Legislative Reforms to Canadian Federalism 17 property taxes as a mechanism for securing private loan repayments is particularly revealing of the City’s continuing reliance on traditional funding revenues that COTA failed to expand. Tower Renewal’s need for provincially approved funding mechanisms despite COTA helps explain why the City still finds itself incapable of raising sufficient revenue for programs related to social housing and assistance that had formerly been partly funded by the Province. Ironically, although the City has yet to be granted approval for the new fiscal powers, on December 6, 2010 the Province released a report entitled Tower Neighbourhood Renewal in the Greater Golden Horseshoe, authored by the same architects and planners behind Toronto’s Tower Renewal plan (E.R.A. Architects 2010). It argues for a tower retrofitting program that mirrors Toronto’s Tower Renewal plans but expands to the 1,925 towers across the Toronto region (Kennedy 2010). The lack of authority provided to the City by COTA despite the Province’s apparent interest in Tower Renewal programs highlights the extent to which COTA failed to sufficiently reconfigure Toronto’s subordinated place in Canadian federalism. Transit City and the Toronto Transit Commission The funding of Mayor Miller’s Transit City plan, an expansion program seeking to bring higher order public transit options to the inner suburbs, is another example of COTA’s failure to provide the City of Toronto with sufficient legislative authority as articulated in the Act’s text. Until 1998, the Toronto Transit Commission (TTC),
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